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Truth in Lending Act

August 22, 2026 · Aditya Gupta

Banking & Credit

The Truth in Lending Act (TILA, Regulation Z) is a 1968 federal consumer protection law requiring lenders to disclose key loan terms before signing — APR, finance charges, payment schedule, total of payments, and right of rescission (3 days for home equity loans). TILA created APR as a standardized comparison metric and bans certain practices like surprise rate hikes. Violations can void the loan or trigger statutory damages. The 2010 CARD Act expanded TILA protections for credit cards: 21-day grace periods, restrictions on retroactive rate increases, clear payment allocation rules. The CFPB enforces TILA along with state attorneys general.

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